FGIC Corporation Announces First Quarter 2008 Results.

NEW YORK -- FGIC Corporation, the parent company of Financial Guaranty Insurance Company, today announced a net loss of $33.4 million for the quarter ended March 31, 2008. The loss resulted primarily from loss and loss adjustment expenses recorded for the quarter, which were largely offset by net unrealized gains in the fair value of credit protection contracts provided by FGIC that are considered credit derivatives under generally accepted accounting principles, as discussed below. The loss and loss adjustment expense reserves related principally to FGIC's exposure to certain collateralized debt obligations of asset-backed securities (ABS CDOs), which are backed primarily by sub-prime residential mortgage-backed securities, and to certain residential mortgage-backed securities (RMBS). The fair value, or mark-to-market, gains related principally to credit protection provided by FGIC in credit default swap form in respect of ABS CDOs.

Loss and loss adjustment expenses for the first quarter of 2008 were $279.2 million before taxes. The increase in loss reserves for the quarter stemmed from continued deterioration in the performance of certain RMBS and ABS CDO transactions written primarily in 2005, 2006 and 2007. FGIC anticipates that any claims relating to these transactions will be made over a period of years. The loss reserves do not reflect the effects, if any, of the Company's loss mitigation efforts and it is not possible to predict the magnitude of any benefit that might be derived from such efforts.

In accordance with SFAS No. 157, which the Company adopted effective January 1, 2008, FGIC updated its mark-to-market methodology to take into account the market's perception of FGIC's non-performance risk. The adjusted methodology, which resulted in a reduction in the valuation of FGIC's derivative liabilities, incorporated spreads of FGIC's credit default swaps. In accordance with SFAS No. 157, the Company recorded a benefit of $1.56 billion in the fair value of credit protection contracts provided by FGIC that are considered credit derivatives, which more than offset the mark-to-market losses of $1.40 billion related to such credit derivatives and resulted in a net unrealized gain of $157.0 million in the fair value of such credit derivatives for the first quarter of 2008.

The first quarter 2008 mark-to-market loss of $1.40 billion consisted of approximately $228 million related to estimated credit impairments and $1.18 billion related to the widening of credit spreads in the structured credit markets. The estimated credit impairment of $228 million represents management's estimate of future claim payments on certain ABS CDOs and other derivative transactions.

Claims-Paying Resources

As of March 31, 2008, FGIC had total claims-paying resources of $5.32 billion. This included capital and surplus of $366 million and contingency reserves of $635 million (which combined comprise qualified statutory capital of $1.0 billion), unearned premium and loss and loss adjustment expense reserves totaling $3.22 billion, the present value of installment premiums of $799 million and soft capital of $300 million.

Financial Statements

The Company expects to post its first quarter 2008 consolidated financial statements on its website (www.fgic.com) as soon as they are available.

Company Profile

FGIC Corporation is an insurance holding company whose wholly owned subsidiary, Financial Guaranty Insurance Company, provides credit enhancement on infrastructure finance and structured finance securities worldwide. FGIC's guaranties typically cover the scheduled payment of principal and interest on an issuer's obligations. Established in 1983, FGIC is rated "BBB" by Fitch Ratings, "Baa3" by Moody's Investors Service and "BB" by Standard & Poor's (S&P). FGIC remains on Ratings Outlook Negative from Fitch, review for possible downgrade by Moody's and Rating Watch Negative from S&P.

Cautionary Statement

This press release contains "forward-looking statements" - that is, statements related to possible future events. Forward-looking statements often address expectations and beliefs as to future performance, results and business plans. You should not place undue reliance on forward-looking statements, because they are necessarily subject to risks and uncertainties that could cause actual results and performance to differ materially from those expressed or implied by our forward-looking statements. Among the factors that could cause our results or performance to differ are: (1) the extent to which we are able to pursue and achieve strategic alternatives, either with or without the participation of potential investors and other third parties; (2) further downgrades to our ratings; (3) our ability to execute our business plan given our current ratings, possible further downgrades and market conditions; (4) the results of loss mitigation efforts; (5) legislative and regulatory developments within the United States and abroad, including the effect of new pronouncements by accounting authorities; (6) competitive conditions and pricing levels; (7) the level and nature of activity within the national and international credit and other markets; (8) fluctuations in the economic, credit or interest rate environment in the United States or abroad; (9) possible defaults and/or additional ratings downgrades or actions in mortgage-backed securities and (10) other risks and uncertainties that have not been identified by us at this time. Forward-looking statements are based upon our current expectations and beliefs concerning future events. We undertake no obligation to update or revise any forward-looking statement, except as required by law.

[TABLE OMITTED]
[TABLE OMITTED]